Russia to optimize state programs

MOSCOW, October 7. /TASS/. State programs as an instrument of strategic planning in Russia are good as such, but the effectiveness of their implementation leaves much to be desired, Russian experts say about the just-started discussion over the possibility of a likely revision of federal targeted programs.

By December 1, 2014 the government is to specify the parameters of all state programs and also to “establish personal responsibility of officials for the effectiveness of measures being taken and for achieving the desirable benchmarks,” as follows from instructions President Vladimir Putin has issued to the Cabinet.

The head of state has more than once urged the officials’ greater responsibility for doing their job right. In February 2012 Putin pointed to the real risk of disrupting the state defense contract, and in March, the program for developing the area of Lake Baikal and the federal targeted program “State Border.”

This time Putin’s instructions followed immediately after a resounding statement by Sberbank chief German Gref at the investment forum Russia Calling last Thursday. Gref said the quality of governance and management in Russia required fundamental improvement. His criticism of state programs was very harsh. Gref said federal targeted programs were consuming up to five trillion rubles, but their results were nowhere in sight. “Let’s ask the question very bluntly — what have these programs achieved over the past five years?” Gref said to draw applause from those present. “That’s the key problem. If we see that the mechanism works with clock-work precision, costs don’t matter. I myself will be prepared to pay higher taxes and spend money there where it becomes more effective.”

Back last July Prime Minister Dmitry Medvedev recalled that more than half of federal budget funds was spent through the mechanism of state programs. Since last year the federal budget has been drafted on the basis of 40 state programs. "The regional and municipal budgets are being transferred to the same program-based principle,” he said.

The main federal targeted programs are Transport Infrastructure, High Technologies Development, Social Infrastructure, Security, Development of Regions, and Development of Agriculture.

Many experts have long asked fundamental questions regarding the effectiveness of budget spending on state programs. Audit Chamber chief Tatyana Golikova argues the state programs’ implementation mechanisms “are not always clear and obvious to the population and businesses.” Some programs, she says, require revision.

Finance Minister Anton Siluanov said recently that spending on all state programs will be scrutinized. The government may give up part of the spending and increase the anti-crisis fund accordingly. Spending on some state programs will be redistributed. Only one program, Clear Water, will be closed down at the Finance Ministry’s initiative.

“Excessive spending occurs under each program,” the daily Nezavisimaya Gazeta quotes the chief of the Finance and Economics branch of the Institute of Modern Development, Nikita Maslennikov, as saying. On the average excessive spending ranges 15%-20% of the program’s overall costs.

Possibly, after detailed analysis part of the spending on ineffective federal targeted programs will have to be curtailed, the expert believes. “The budget is now in a situation that requires solutions crucial to increasing the effectiveness of government spending,” he said.

“The programs as such are an excellent instrument of strategic planning. They are used all over the world and nobody has any plans of cancelling them altogether,” Professor Dmitry Zemlyakov, of the Russian Economics and Civil Service Academy, told TASS. “Poor implementation, non-transparent mechanisms and embezzlement constitute a real problem.”

The expert believes that control has to be tightened. “There must be transparency and strict responsibility,” he added. “China is a good example for us in that sense.”

The implementation of such programs ensures the development of some branches of the economy at the expense of public funds and private investment,” Vladislav Ginko, a teacher at the Russian Economics and Civil Service Academy, told TASS. Elements of state capitalism are present in the advanced economies as well, he recalled.

“This instrument as such is not bad at all, but all depends on the quality of governance and management,” he added.